They started an online property portal in a small apartment. Now it’s worth millions

Zameen is arguably the Pakistani startup ecosystem success story of the year. The online property portal announced earlier this week that it raised US$9 million in series B funding – easily the highest amount of cash secured by any homegrown startup this year. Sure, there’s Rocket Internet-backed Daraz in the mix too with a blockbuster US$55 million, but Zameen is a purely local company, with local founders who have retained majority stake in the venture. The same cannot be said about the ecommerce marketplace.

Conceptualized by brothers Imran and Zeeshan Ali Khan, Zameen was founded in 2006 after they moved back to Pakistan from the UK. Both are highly educated, with degrees from Imperial College and Oxford, and ran a successful online B2B classifieds portal before deciding to explore opportunities in their country of birth. However, while their classifieds business in the UK was doing “really well,” the entrepreneurs decided to use their returns and invest in other businesses as well.

“We were managing over a hundred websites, including directories, referrals, affiliate marketing, even traditional businesses like running a gym. In the end it got too much, we were doing too many things and made a lot of mistakes,” says Zeeshan. “We realized this was not going to work out and we needed to focus on a specific vertical.”

That vertical was property. The brothers were convinced there was huge potential for disruption in this space. Back in 2006 the state of internet infrastructure in Pakistan was extremely poor but the offline property market was exploding. Facilitated by large investments from the Pakistani diaspora, people found that investing in real estate would earn them significant returns. Some looked at it as a speculative bubble, but there’s no denying the fact that if an investor bought a piece of land and sold it merely six months later, they could very easily have earned a return of around 30-40 percent, maybe even more.

Zameen’s Imran Ali Khan

Another factor influencing the brothers’ decision was their prior experience and exposure to western markets. “There’s a lot of mobility in the property market. People are constantly buying and renting properties and the value of each transaction is high,” explains Imran. “We saw a lot of people [in the UK] searching for property online and knew the model could be replicated in Pakistan.”

Starting off lean

Zameen’s basic operations began in a small apartment in Lahore. The biggest obstacle the founders faced in convincing property agents to come online was that the agents were completely clueless on how to operate computers or even access the web. Unperturbed, the brothers would write down details of listings on pieces of paper, take photographs, and go back to their office to do data entry. Nevertheless, there was skepticism on the agents’ part on whether the portal would actually drum up more business. They strongly resisted to changing the traditional ways of doing business.

To facilitate and scale listings on Zameen, the brothers made it completely free for agents to advertise their properties on the site. Only much later did it start monetizing, by introducing sponsored listings, as well as display products, branding, and advertising. The crucial factor that helped it gain early traction was interest in the property market from expatriate Pakistanis. They were used to searching for property online and keen on making investments back home. Zeeshan indicates that in the first few years approximately half of all traffic was generated from outside Pakistan. As a result, agents started getting calls and converting leads sourced through Zameen.

“In terms of growth, it was all organic for the first two to three years. Word of mouth definitely helped – property agents are a tightly-knit community and they were quick to inform others when they closed a deal. As a result, we were approached by more agents requesting to put their listings online.”

Zeeshan Ali Khan

The business was chugging along nicely, when, in 2011, the brothers were approached by French investor Gilles Blanchard. Gilles was the co-founder of French real estate portal Seloger, and had sold his business to Axel Springer in 2010 for US$960 million. He had money to invest and time to pick the right business. Imran says that Gilles was alerted to Zameen by his Pakistani friends. He was impressed by the founders’ drive and commitment, and decided to participate in an angel investment round, also joining the startup as its chairman.

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